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Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil 'production,' meaning extraction & refining (currently about 83 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence 'peak'. Peak Oil means not 'running out of oil', but 'running out of cheap oil'. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.

For obvious reasons, people have extracted the easy-to-reach, cheap oil first. The oil pumped first was on land, near the surface, under pressure and light and 'sweet' and easy to refine into gasoline. The remaining oil, sometimes off shore, far from markets, in smaller fields, or of lesser quality, will take ever more money and energy to extract and refine. The rate of extraction will drop. Furthermore, all oil fields eventually reach a point where they become economically, and energetically no longer viable. If it takes the energy of a barrel of oil to extract a barrel of oil, then further extraction is pointless.

In the 1950s a US geologist working for Shell, M. King Hubbert, noticed that oil discoveries graphed over time, tended to follow a bell shape curve. He posited that the rate of oil production would follow a similar curve, now known as the Hubbert Curve. In 1956 Hubbert predicted that production from the US lower 48 states would peak in 1970. Shell ordered Hubbert not to make his studies public, but the notoriously stubborn Hubbert went ahead and did it anyway. As it turned out, most people inside and outside the industry dismissed Hubbert's predictions. In 1970 US oil producers had never produced as much, and Hubbert's predictions were a fading memory. But Hubbert was right, US continental oil production did peak in 1970/71, although it was not widely recognized for several years and only with the benefit of hindsight.

No oil producing region neatly fits bell shaped curve exactly because production is dependent on various geological, economic and political factors, but the Hubbert Curve remains a powerful predictive tool.

For about 30 years the world has been finding less oil than it has been consuming. Discovery of new oil fields peaked in the 1960s. Around 50 oil producing countries have already peaked and now produce less and less oil each year, including the USA and the North Sea. Hubbert's methods, and variations of them, and other methods entirely, have been used to make various projections about the global oil peak, with results ranging from 'already peaked', to the very optimistic 2035. Many of the official figures used to model oil peak such as OPEC figures, oil company data, and the USGS discovery projections, upon which the international energy agencies base their own reports, can be shown to be very unreliable. Several notable scientists have attempted independent studies, most notably Colin Campbell and the Association for the Study of Peak Oil and Gas (ASPO).

ASPO's latest 2004 model suggests a peak of 'conventional' oil in 2005, and all oil and gas liquids in 2008. Others such as Kenneth Deffeyes and A. M. Samsam Bakhtiari have made similar or even earlier predictions, although precise predictions are difficult as much secrecy shrouds important oil and gas data.

Globally, natural gas is also expected by some to peak within decades, although its affects are more localized due to the added expense of transporting liquefied natural gas (LNG). Both British and North American natural gas may have peaked already.

Our industrial societies and our financial systems were built on the assumption of constant growth, growth based on ever more readily available cheap fossil fuels. Oil in particular is the most convenient and multi-purposed of these fossil fuels. Oil currently accounts for about 40% of the world's commercial energy, and about 90% of transportation energy. Oil is so important that the peak will have vast implications across the realms of geopolitics, lifestyle, agriculture and economic stability.

But it's just oil - there are other fossil fuels, other energy sources, right?Edit

To evaluate other energy sources it's important to understand the concepts of embodied energy and Net Energy or ERoEI Energy Return on Energy Invested. One of the reasons our economies use ever increasing quantities of oil is precisely because oil has a comparatively high ERoEI. Historically, for every barrel of oil used for exploration and drilling of oil, 100 barrels were found. This was an unprecedentedly high ratio for an energy source, although these days the ratio is far lower. Certain alternative energy 'sources' actually have ERoEI ratios of less than one, such as photovoltaics (arguably) and most methods of industrially producing biodiesel and ethanol. That is, when all factors are considered, you probably need to invest more energy into the process than you get back.

For instance, hydrogen, touted by many as a seamless solution, is actually an energy carrier, but not an energy source - it must be produced using an energy source such as natural gas or nuclear. So while it may or may not be a convenient store of energy, its Net Energy will be negative. Some alternatives such as wind and hydro have better ERoEI, however their potential expansion may be limited by various physical factors. Even in combination it may not be possible to gather from renewable sources of energy anything like the amount of energy we are used to.

For certain tasks, such as air travel, no other energy source can readily be substituted for oil. Alternative energy infrastructures require long periods of investment, on the scale of decades, to be widely implemented. We may be already leaving the period of cheap energy before we have begun seriously embarking on this task.

It's worth noting briefly that any ERoEI study is complex and different methods of accounting can come up with vastly different results, so any net energy study might be viewed with some suspicion. Perhaps the best method yet developed is Howard Odum's eMergy analysis. But we may not know for sure how useful renewable energy technologies are until the hidden fossil fuel energy subsidies are finally removed.